HARBEL SINGH AND SONS,DELHI V. DCIT, CENTRAL CIRCLE-30, DELHI

ITA 1079/DEL/2025

AI Insights

The case involves M/s. Harbel Singh and Sons, a civil construction business, appealing against the orders of the Commissioner of Income Tax (Appeals)-30, which treated their purchases from the Sanjay Jain & Mehta group as bogus under section 69C of the Income-tax Act, 1961. The purchases in question amounted to significant sums over the four assessment years from 2018-19 to 2021-22. The tribunal noted that while the purchases were sourced from unregistered dealers, the corresponding sales were not questioned. The tribunal decided to disallow a lumpsum of 6% on the bogus purchases, citing various judicial precedents with divergent views on similar issues.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826134 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2020-2021
• Appeal Filed On: 25-02-2025
• Other Referred Cases: Ravjibhai Becharbhai Dhamelia vs. ACIT, PCIT Vs. Hitesh Mody (HUF), PCIT Vs. Forum Sales (P) Ltd., PCIT Vs. Kanak Impex (India) Ltd, DCIT Vs. Kohinoor Foods Ltd., DCIT Vs. Tirupati Matsup (P.) Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMISH S. GUPT
• Assessee Lawyers: PARUL AGGARWAL
• Keywords: Bogus purchase; Bogus
• Section: 143(3); 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘E’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA Nos.1077 to 1080/Del/2025 Assessment Years: 2018-19 to 2021-22 M/s. Harbel Singh and Sons, H-18, Jangpura Extension, Jungpura S.O. Jeewan Nagar, South East Delhi, Delhi Vs. DCIT, Central Circle-30, New Delhi PAN: AAAFH3105M (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM These assessee’s four appeals ITA Nos. 1077 to 1080/Del/2025 for assessment years 2018-19 to 2021-22 arises against the Commissioner of Income Tax (Appeals)-30 [in short, the “CIT(A)”], Delhi’s orders, all dated 09.01.2025, having DINs and orders No. ITBA/APL/M/250/2024-25/1072033246(1), ITBA/APL/M/250/2024-25/1072033006(1), ITBA/APL/M/250/ 2024-25/1072032810(1), ITBA/APL/M/250/2024- Assessee by Ms. Parul Aggarwal, CA Department by Ms. Amish S. Gupt, CIT(DR) Date of hearing 07.01.2026 Date of pronouncement 07.01.2026 Printed from counselvise.com ITA Nos.1077 to 1080/Del/2025 2 | P a g e 25/1072032633(1), involving proceedings under section 153C r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), respectively. Heard both the parties. Case files perused. 2. It emerges during the course of hearing that the assessee presses for his sole substantive ground on merits challenging both the learned lower authorities’ action treating his purchases amounting to Rs.6,64,062/- in AY 2018-19, Rs.2,42,04,145/- in AY 2019-20, Rs.85,20,719/- in AY 2020-21 and Rs.8,32,341/- in AY 2021-22 sourced from M/s. Sanjay Jain & Mehta group, as bogus one under section 69C of the Act, in the respective assessment orders, as upheld in the lower appellate discussion. 3. That being the case, both the parties vehemently reiterate their respective stands against and in support of the impugned bogus purchases disallowance. We wish to make it clear that there is no dispute in principle that the assessee is engaged in civil construction business all along wherein possibility of assessee sourcing its purchases from unregistered dealers per se could not be altogether ruled out as well. And that his corresponding sales have nowhere been questioned in both the lower proceedings. Printed from counselvise.com ITA Nos.1077 to 1080/Del/2025 3 | P a g e Various recent judicial precedents (2025) 173 taxmann.com 592 (Guj.) Ravjibhai Becharbhai Dhamelia vs. ACIT; (2024) 160 taxmann.com 110 (Bom) PCIT Vs. Hitesh Mody (HUF), (2024) 160 taxmann.com 93 (Del) PCIT Vs. Forum Sales (P) Ltd.; (2025) 172 taxmann.com 283 (Bom) PCIT Vs. Kanak Impex (India) Ltd; (2025) 178 taxmann.com 424 (Del. – Trib.) DCIT Vs. Kohinoor Foods Ltd.; and (2025) 177 taxmann.com 836 (Delhi-trib.) DCIT Vs. Tirupati Matsup (P.) Ltd. have recently decided the instant issue of bogus purchases with divergent views as well. 4. Faced with these peculiar facts, it is thus deemed appropriate in the larger interest of justice that a lumpsum disallowance @ 6% of the assessee’s alleged bogus purchases amounting to Rs.6,64,062/- in AY 2018-19, Rs.2,42,04,145/- in AY 2019-20, Rs.85,20,719/- in AY 2020-21 and Rs.8,32,341/- in AY 2021-22; respectively, would be just and proper with a rider that the same shall not be treated as a precedent. The assessee’s book entries are hereby rejected to the very extent. Necessary computation shall follow as per law. No other ground or argument has been pressed. Printed from counselvise.com ITA Nos.1077 to 1080/Del/2025 4 | P a g e 5. These assessee’s four appeals ITA Nos.1077 to 1080/Del/2025 are partly allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 7th January, 2026 Sd Sd/- (AMITABH SHUKLA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 9th January, 2026. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "